Aplana aims to double sales in 2002
The Russian Journal, by Vladimir Kozlov
Aplana Software, recently spun off from the software-development arm of its parent company IT, said it expects to double its turnover this year by targeting both domestic and foreign customers.In 2001, Aplana signed seven new contracts, mostly with Russian companies, and is in negotiations with several prospective customers overseas, general director Victor Weinstein said.
"In the West, we are looking for contracts worth at least $100,000," he said. "Overall, we're learning to work independently from IT."
The first steps were not easy, Weinstein said, explaining that customers had become used to dealing with the well-known brand IT and were cautious about the lesser-known Aplana. "We realized how important the brand name is. It wasn't very easy to persuade customers to work with a new company."
Still, the subsidiary is doing some work under the IT brand as a subcontractor. This arrangement accounts for about half of the company's orders within Russia. Overseas, where Aplana has only recently begun marketing (it has one contract so far), the outlook is different.
"For foreign customers, professionalism is the primary factor," said Weinstein, explaining that the brand is far less important than the contractor's track record and number and quality of employees. With the backing of 900-person-strong IT, Aplana may be positioned well.
"True, there are [information technology] companies with staffs of 10,000 in India, but the average software developer still has about 300-500 employees," Weinstein said.
Topping the company's agenda for 2002 is the goal of doubling last year's $1.5 million in sales, which Aplana accomplished as a unit of IT. Aplana hopes to continue at the same pace over the coming years. However, while Aplana has opened a small representative office in the U.S. state of Connecticut, it does not plan to have a full-scale sales operation abroad until late this year.
"We haven't yet made enough money to open a sales office with a marketing and sales team and account managers in the West," Weinstein said. "It doesn't make sense to open an overseas office unless you can invest at least $500,000."
Aplana sells its services abroad via two established partners, both medium-sized systems integrators, and says it has no plans to add other partners anytime soon. Even after the sales office in the West opens, Weinstein said, the company will not have more than four partners.
"We have to be careful, and steps at expanding the sales structure should follow production expansion," he said. "We need to carefully plan our resources."
The general director said Aplana intends to focus on two types of clients in its future foreign activities.
"We want to have five to six anchor clients with annual [information technology] budgets of at least $300,000, who will treat us as an extension of their IT departments," he said, adding that the company is negotiating with a few such potential customers in the United States and France. "In a way, the bursting of the IT bubble last year helped us, because many companies now choose to outsource IT work rather than have an internal IT department."
Aplana expects about 60 percent of all of its overseas income to come from these anchor clients, with the rest from smaller firms with annual information technology budgets of $50,000 to $300,000. The software company will work on individual projects with the smaller companies. Domestic customers are likely to account for 20-25 percent of Aplana's business, about half of them working as subcontractors, Aplana estimates.
"These could be medium to large companies in the manufacturing sector, or banks primarily interested in enterprise-resource planning systems or analytical modules," Weinstein said. "But we try not to differentiate between different sectors."
By VLADIMIR KOZLOV / The Russia Journal